Textron Systems [TXT] is finding it more and more important to expand its core products and services domestically and internationally while their first commitment remains fulfilling customer priorities and delivering value to shareholders, the top executive said.
International sales of sensor- fused weapons, and the Commando family of vehicles, for example, keeps domestic production lines hot, Ellen Lord, president and CEO of Textron Systems, told Defense Daily.
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| 90mm Direct Fire Commando Variant. Photo by Textron |
International business has been very important– “in 2013, now, it’s about 35 percent of revenue and has been growing since 2008, so it’s not new and we anticipate further significant growth,” she said.
Right now, Textron Systems’ armored vehicles program involves Afghanistan, Canada and Colombia, and it is working with other countries.
Lord was in Afghanistan in May, where she saw firsthand how the U.S. investment has moved into an upgraded program for the Afghan National Army, providing not only hardware, but also training, with hundreds of employees in theater working shoulder-to-shoulder with the Afghan Army.
“It’s a great partnership; it keeps the production line growing, also including variants,” she said.
At the same time, Textron Systems is managing risk in multiple ways.
“We’re committed to being very, very close to our customers,” she said, constantly meeting with the acquisition and user communities. “We make very calculated investment in terms of where we are putting our discretional funds.”
One change in the last year or so is that Textron Systems is no longer “depending on international business development people to hop on planes and fly. Now, they are embedding in the country,” Lord said.
That means while selling armored vehicles, like the Commando family, in Afghanistan, there is an office and hundreds of people on the ground. The same is true for Canada, where Textron is executing the Tactical Armored Patrol Vehicle (TAPV). The company is also putting a program manager in Colombia now that they are delivering vehicles there. It’s all to become close to and understand the country.
“We lean forward,” she said. “Dealing with the Afghan National Army, we heard what was needed and put our own money into the 90mm direct fire variant of Commando Select, and we are now getting orders.”
This direct fire variant is at the Textron exhibit at the Association of the United States Army. That variant was a targeted investment building on the Armored Security Vehicle. The Afghan National Army is ordering the vehicles to become part of its Mobile Strike Force Units. Textron personnel are in country training vehicle operators and maintainers.
The new 90mm Direct Fire vehicle is equipped with a CMI Defense Cockerill CSE 90LP weapon system, which offers day/night combat capability for tactical options ranging from counter-insurgency to conventional combat operations, the company said. The two-person, low profile turret is lightweight and simple to operate and maintain, and is outfitted with a Cockerill Mk3 90mm low-pressure gun.
Discretionary funding is also going into the Shadow M2 Tactical Unmanned Aerial Vehicle, providing it with new power, performance and payload. There was significant interest in a higher-end payload. It is also being marketed internationally.
“We’re spending money in a more focused way,” Lord said. There are lots of conversations on upcoming requirements and in this competitive environment the company is “being very serious about bringing fully capable systems to market to demonstrate and sell.”
The militaries are now asking us to show the capability with Technology Readiness Levels of 7 or 8.
“We all need to be extremely cost conscious in this environment,” Lord said. “I think it’s causing us to be really, really smart on how to deploy our very precious resources–discretionary dollars or our talent.”
Textron Systems has been looking at international markets for some time. For example, since 2004 it has had a presence in Bangalore, India with an engineering group doing a lot of IT work. With global resources, and help from business development, there was a sale of the sensor fuzed weapon, due to good collaboration.
The way Textron Systems views the world is changing, she said.
“The one thing that I think has really changed, we’ve evolved to looking at security solutions versus just selling products, which is part of the reason for putting high level business development individuals in country,” she said. “So they can really understand what the requirements are and bring the whole variety of products to bear–wheeled vehicles, unmanned vehicles–and to be smart about our sister companies, such as Cessna and Bell Helicopter. We talk all the time and do a lot of cross marketing these days.”
Textron is not viewed as a giant defense contractor, and that is a good thing, she said. “Big enough to be extremely significant in the marketplace, but still small enough to work together…We meet eyeball to eyeball.”
The company is always looking for new opportunities to grow the business, whether by acquisition or partnerships.
Something else that’s changed over the past couple of years is that Textron Systems has become more aggressive about strategic workforce planning. “Moving people around, particularly high performers and those with geographic mobility,” she said. “We aggressively move them around so they get many types of experience, learn a lot of different products and can have a sense about what capabilities a customer requires and how to put things together to bring capability, not just sell a product.”